SBC offers $19.95 DSL with a catch

SBC Communications on Thursday said it will offer broadband DSL access at $19.95 for people who buy its local and long distance voice package.

The Baby Bell said the $19.95 offer for SBC Yahoo DSL requires a one-year commitment to its All Distance service, which includes unlimited local and long distance calling, voicemail, call waiting and two additional services. The DSL service promises download speeds between 384kbps and 1.5mbps, and an upload speed of up to 384kbps.

But there's a catch. All Distance costs $48.95 a month, putting the total price of the DSL and phone package at nearly $70 a month. SBC's most popular price plan up to now costs $26.95 a month but does not require people to buy All Access. For unlimited local phone calls, SBC charges $10.69 a month, keeping the total package under $40.

SBC's price plan highlights an attempt by the company and its other Baby Bell cousins to block the exodus of wireline customers to wireless and cable services. Over the past year, the Bells have offered discounted DSL service bundled into voice lines as a way to retain its customers and tap the growing demand for broadband.

Indeed, the Bells' offerings are much cheaper than their cable rivals, which typically sell broadband service for about $45 when bundled in with video. But cable companies, such as Comcast and Time Warner Cable, were first to market and remain the market leaders for household broadband customers.

The Bells are trying to fight back against cable. SBC, Verizon Communications, BellSouth and Qwest Communications are among the telecommunications providers upgrading their networks to handle higher bandwidth applications such as video.

SBC last week granted equipment maker Alcatel a $1.7 billion contract to install fiber optic lines in its network infrastructure to eventually handle video. Verizon this week named Motorola as its equipment vendor to facilitate its own video service.

DSL adoption continues to grow. Verizon today reported earnings and said it had added 309,000 DSL customers for its most recent quarter, but executives warned that the company could sell off its local phone lines in underperforming markets. SBC last week reported 402,000 new DSL lines for the quarter, adding 1.5 million new customers over the previous 12 months.